• The Sindh government doubled the service tax on debit and credit card payments to 15%.
• The new tax rate will apply to payments at 58 authorized restaurants and cafes.
• The increase aims to boost revenue and address the province’s revenue shortfall.

KARACHI – The Sindh government has announced a significant increase in the service tax on debit and credit card payments made at various restaurants and cafes. The service tax has been raised from 8% to 15%, effective immediately. This decision aims to boost revenue for the provincial government.

Previously, the provincial government had reduced the tax on card payments to 8% to encourage online transactions and reduce cash payments. However, the latest change reverses this reduction, with the service tax now doubled.

The Sindh government has instructed the 58 authorized restaurants and cafes to apply the new tax rate. This move is part of a broader strategy to address revenue shortfalls and enhance income from the hospitality sector.

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The increase in service tax is expected to impact restaurant and cafe sales negatively. Card payment tax is a significant source of revenue for the provincial government, and this adjustment aims to improve financial inflows amid ongoing revenue challenges.